Study: Medicaid Expansion Is Leading Fewer People To Sign Up For Disability Benefits

Medicaid expansion under the Affordable Care Act could save the government money by causing fewer people to sign up for disability benefits, according to a new study from Indiana University’s School of Public and Environmental Affairs.

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The research team found a 3-4 percent reduction in the number of people receiving supplemental security income — which benefits disabled people with lower incomes — in states that expanded Medicaid.

Some people sign up for disability in order to get Medicaid, says senior researcher Kosali Simon, a professor of health economics at IU. But expansion states made it easier to qualify for Medicaid without having a disability.

“Now they have a way to get healthcare to deal with the health conditions that … would potentially make them move onto the disability rolls,” says Simon.

Medicaid expansion costs are much greater than these savings, but Simon says policymakers should keep these effects in mind along with the other results of the expansion.

“It’s simply a side benefit people might not have thought about,” Simon says.

It’s too early to know much about the effects of the Medicaid expansion under the Affordable Care Act. But Simon says studies of Medicaid expansion in the past showed benefits — such as higher earning potential, higher educational achievement and lower mortality rates —outweighed the costs.

“The consensus from this new literature seems to be that the expansions more than paid for themselves through social benefits,” she says.

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In 2015, Indiana expanded its Medicaid program under the Affordable Care Act. The Healthy Indiana Plan, or HIP 2.0, extended coverage to about 250,000 low-income Hoosiers who were not previously eligible. Amid the turmoil in Washington over what to do with Obamacare, Indiana has applied to keep the program running for three more years.